When to fire your financial planner


Posted at Jul 29 2014 04:46 PM | Updated as of Jul 30 2014 12:46 AM

MANILA, Philippines - Breaking up is never easy. This is true not just for couples, but also with your financial adviser.

ANC On The Money's resident financial adviser Salve Duplito noted that Filipinos have a hard time with "break-ups", mainly because Filipinos are so connected with each other.

"The Filipino culture of relationships taking precedence over common sense has a big bearing on how we deal with financial advisers," she said.

Most of those who call themselves financial advisers are insurance agents. Duplito noted that a lot of times, one buys financial products out of "hiya" or to avoid disappointing people.

Most Filipino financial consumers do not even look at the fine print because they trust the person selling the product, particularly when they're friends or relatives.

When this is the case, Duplito noted that firing the person is a huge problem.

When and why should you cut ties with your financial adviser?

Duplito cited some red flags that tell you it's time to say goodbye to your financial planner:

1. If you're being sold expensive products that don't match your goals.

2. If your planner does not disclose risks.

3. If your planner is a salesman in disguise.

4. If your planner has no knowledge of the financial planning process and can only help you only with bits of it.

5. If your planner is unreachable when you need to talk.

6. If your planner doesn't listen. While he/she may know more, in the end, it's your money.

7. If there is breach of confidentiality agreements.

8. If he/she is chasing returns and wants you to move from one investment to the other.

How to fire your financial planner

There is no easy way to fire your financial planner, but Duplito said the best way is to simply "cut clean."

"Let me warn you, your planner is going to make it difficult for you to do that because she will ask you to stay. If you're worried, you can't handle that, it's alright to notify your adviser in writing," she said.

In writing the letter, Duplito said you should keep it short and concise.

"There is no need to indicate your reasons. If she insists, be firm and keep the conversation short," she said.

If your planner is managing your accounts, Duplito said you should indicate in the letter that he/she should transfer all controls to these accounts.

Once this is done, you should change passwords immediately.

"To avoid making the same mistake, if you're planning to hire a replacement be sure you sign up only with someone who provides a contract that clearly states terms of reference, fees and charges, confidentiality agreements among other things," Duplito said.

When dealing with an insurance agent or investment solicitor who does not normally draw up an engagement contract, Duplito said you should require the agent to disclose all risks, fees, charges and commissions at the beginning.